Health & Welfare Plans Newsletter

July 24, 2019

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[Guidance Overview]

Final Regs Expand Opportunities for Employers to Offer Account-Based Group Health Plans

"Effective January 1, 2020, employers will have far greater plan design options for implementing these account based plans.... [T]hese additional options will increase demand for these types of benefits, especially with certain types of employers.... These benefits will likely provide greater cost certainty for employers and provide protection against potential penalties under the Employer Shared Responsibility Payment provisions of the ACA."
Hodgson Russ LLP

[Guidance Overview]

IRS Alleviates Chronic Conditions for HDHPs -- and Hopefully Participants Too!

"The good news is that if your specific condition is on the list and your HDHP elects to provide coverage before the deductible, the deductible is no longer a major obstacle for you to receive the necessary care. If your specific condition is not on the list, you still need to wrestle with the cost of health care until you satisfy your HDHP's deductible."
Miller Johnson

[Guidance Overview]

Proposed Regs Would Roll Back Portions of the ACA Nondiscrimination Rules

"The new proposed regulations just issued make three key changes: [1] Removal of gender identity protection from the current regulations; [2] Reduction of the types of employer group health plans considered 'covered entities' subject to Section 1557 of the ACA; and [3] Elimination of certain onerous participant notice requirements."
Miller Johnson

[Guidance Overview]

Oregon Enacts Expansive Paid Family and Medical Leave Law

"Oregon is the latest state to enact a paid family and medical leave law. The law, which will cover all employers with one or more employees working in Oregon, establishes a state-managed insurance program with employers and employees paying into a paid leave insurance fund. While the law will take effect on September 29, 2019, employers will not be required to begin contributing to the fund until January 1, 2022, and employees will become eligible for benefits beginning in January 2023."
Proskauer

2020 Affordable Percentage for Employer Health Coverage Shrinks

"The [ACA] benchmark for determining the affordability of employer-sponsored health coverage will decline to 9.78% of an employee's household income for the 2020 plan year -- a small decrease from the 2019 plan-year level of 9.86% ... This affordability percentage can affect individuals' eligibility for federally subsidized coverage from a public exchange, as well as employers' potential liability for shared-responsibility (or 'play or pay') assessments."
Mercer

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IRS Expands Predeductible Preventive Care for HSA-Qualifying Health Plans

"Notice 2019-45 expand[s] the preventive care safe harbor to allow predeductible HDHP coverage of specific medications and supplies for certain chronic conditions. According to the agencies, the added items are low-cost and clinically proven to keep a chronic condition from getting worse or triggering a secondary condition that is expensive to treat. The agencies also claim there is 'medical evidence supporting the high cost efficiency (a large expected impact) of preventing exacerbation of the chronic condition or the development of a secondary condition.' "
Mercer

Health Literacy and Benefits Education to Help Employers' and Employees' Wallets

"To achieve buy-in, communication regarding health insurance and benefits should resemble a marketing campaign more than a typical HR information campaign. Use a variety of communication methods, such as handouts, emails, videos, face-to-face meetings and presentations. Repeat key messages to ensure sufficient exposure and understanding.... At a bare minimum, focus your education and communication strategy on teaching employees about the basics of health insurance."
CBIZ

Workers Sue Yale University Over Workplace Wellness Penalties

"The suit ... charges that Yale's Health Expectations program requires approximately 5,000 union employees and their spouses to submit to medical tests and to allow release of their insurance claims data to wellness vendors. Employees who don't participate face a penalty of $1,300 per year, the suit alleges." [Kwesek v. Yale Univ., No.  19-1098 (D. Conn. complaint filed Jul. 16, 2019)]
Society for Human Resource Management [SHRM]; membership may be required to view article

San Antonio's Paid Sick Leave Law Put on Hold Pending Legal Challenge

"On July 15, 2019, the Texas Attorney General and about a dozen business groups filed suit against the City, alleging that the paid sick leave ordinance is unconstitutional because it is preempted by the Texas Minimum Wage Act.... [T]he parties entered into an order agreeing to stay the implementation of the law until December 1, 2019."
Proskauer

Senate Finance Committee Unveils Bipartisan Bill to Lower Drug Costs

"[The] Prescription Drug Pricing Reduction Act of 2019 includes an overhaul of parts of Medicare and Medicaid, including requiring drug manufacturers to pay a rebate to Medicare if their price hikes surpass the inflation rate. This, combined with a proposed restructuring of the Part D benefit, would save Medicare $85 billion over the next 10 years ... CBO also estimates that beneficiaries would save $27 million in OOP costs over the same period."
American Journal of Managed Care

California Extends Paid Family Leave from 6 Weeks to 8 Weeks

"Beginning on July 1, 2020, California will extend the maximum duration of Paid Family Leave (PFL) benefits from six weeks to eight weeks.... Senate Bill 83 ... is a move toward the governor's goal of ultimately expanding paid family leave to six months (for two parents if leave is taken consecutively). To that end, Senate Bill 83 also requires the governor to propose, by November 2019, further benefit increases and job protections for individuals receiving PFL benefits, including an increase in PFL duration 'to a full six months by 2021-22.' "
Jackson Lewis

Top Non-Traditional Employee Benefits to Offer During Open Enrollment

"[1] Identity theft protection ... [2] Pet insurance & veterinary discounts ... [3] Legal insurance ... [4] Financial wellness."
Benefitfocus

Health and Productivity Challenges of Lower Wage Workers

"From 2007 to 2017, two out of five lower-income employees (with annual family incomes less than $35,000) were uninsured.... One in three lower-income employees experienced a cost-related barrier to care over the course of 12 months.... Compared to insured employees in plans with low deductibles, lower-income employees enrolled in high-deductible plans were 75% more likely to experience a cost-related barrier to care.... On average, a lower-income employee who experienced a cost-related barrier to care had 1.9 more lost workdays per year than a lower-income employee who experienced no barriers to care -- a 70% increase in lost work time from a baseline of 2.7 days."
Integrated Benefits Institute

Among People with Employer Coverage, Those with Persistently High Spending for Several Years Averaged Almost $88,000 in Health Spending in 2017

"Among people with three consecutive years of coverage from a large employer, just 1.3 percent of enrollees accounted for 19.5 percent of overall health spending in 2017 ... These 'people with persistently high spending' -- people in the top five percent of spending in each of the three years from 2015 to 2017 -- had average health spending of $87,870 in 2017. That compared to average per person spending of $5,870 among all large group enrollees during that period."
Henry J. Kaiser Family Foundation

Benefits in General

Potential Changes to Annual Plan Audits for Large Employers Spark Concerns

"In its request to the council, which consists of 15 members appointed by the labor secretary to represent various interests in the retirement landscape, the DOL raised concerns about the 'commoditization' of plan audits.... Part of what the council is examining is how plan sponsors approach the audit process, said Srinivas D. Reddy, ... chairman of the council. Because the audit is mandated and does not provide a 'tangible benefit to the plan sponsor, but is adding cost,' the council is seeing whether plan sponsors are getting the full value of an audit, Mr. Reddy added."
Pensions & Investments

Selected Discussions
on the BenefitsLink Message Boards

Medical Evaluation Process for Disability: How Do Other Employers Do It?

We're a governmental employer and we're now reviewing our medical evaluation process for assessing disability benefit applicants, and we would appreciate feedback from other jurisdictions regarding their practices. Does a third party manage the evaluation process or a panel of doctors? If a panel of doctors oversees the process, how many serve on your panel? What is your method of compensation (flat monthly amount, paid per case)?
BenefitsLink Message Boards

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2019 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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